From the ancient Mayan ruins of Tikal to the vibrant markets of Antigua, Guatemala encompasses a rich cultural heritage alongside modern innovation.
The Guatemalan government’s efforts to create a business-friendly environment and the country’s advanced infrastructure and connectivity make it an ideal choice for companies looking to expand their global team with top talent.
Key takeaways:
- Guatemala is an emerging hub for global hiring, with a wealth of skilled professionals eager for remote work opportunities with international companies.
- Understanding Guatemalan regulations regarding contracts, working hours, tax regulations, and benefits will help ensure a smooth and compliant hiring process.
- Employers must pay 13th and 14th-month salary bonuses, each equivalent to one month’s salary.
Advantages of Hiring in Guatemala
Guatemala has taken a significant step towards attracting more investment and accelerating its economic growth by establishing a revolving fund to finance pre-investment studies for infrastructure projects.
The FIP fund is a collaborative effort between Guatemalan authorities and U.S. officials who have committed $7 million over three years to support this initiative.
Guatemala also has a strong talent pool of bilingual professionals, many fluent in Spanish and English.
Here is a quick overview of Guatemala:
- Language: Spanish
- Currency: Guatemalan Quetzal (GTQ)
- Capital City: Guatemala City
- Population: 18 million
- Cost of Living Rank: 98th
Strategic Investments Fueling Guatemala’s Economic Growth
Guatemala invests heavily in education to develop a skilled workforce aligned with labor market needs.
The Millennium Challenge Corporation allocated over $27 million for investment in Guatemalan education projects, including $4.2 million for technical and vocational education and training initiatives.
Common remote job titles in Guatemala include:
- Software Engineer
- Product Manager
- Customer Service Representative
- Graphic Designer
- Project Manager
Hiring Compliantly in Guatemala
Employment Contracts
Guatemala recognizes two primary types of labor contracts under its Labor Code:
- Indefinite-term contracts are the most common, lasting until either party terminates them through mutual agreement or for reasons like resignation or misconduct.
- Fixed-term contracts have a specified duration and are for temporary roles.
Working Hours & Pay
In Guatemala, the standard workday is eight hours, with a maximum of 44 hours per week. Overtime kicks in after that, which is paid at 150% of the regular rate.
Employers must also pay 13th and 14th-month salary bonuses equivalent to one month’s salary each in July and December.
In 2024, the minimum wage in Guatemala increased to GTQ 3,384.59 per month for non-agricultural jobs.
Probation Periods
The standard probation period for employees in Guatemala is typically two months. However, this can be extended to six months by mutual consent between the employer and the employee.
Employer Taxes
Employers in Guatemala must contribute 12.67% of each employee’s gross salary to the Guatemalan Social Security Institute (IGSS). This covers pensions, healthcare, disability, and maternity benefits.
Companies may also be required to contribute to the Recreational Training Institute (IRTRA) at varying rates depending on the industry.
Termination Process & Severance Pay
Terminating an indefinite contract in Guatemala involves specific notice periods based on how long the employee has worked for the company:
- 0-6 weeks: 1 week notice
- 6-12 months: 10 days’ notice
- 1-5 years: 2 weeks’ notice
- 5+ years: 1 month notice
Employees are entitled to one month’s severance pay for each year of uninterrupted service. If terminated without cause, they receive up to 12 months of wages.
Paid Leave Laws in Guatemala
Vacation and Holiday
Guatemalan employment law stipulates that employees completing one year of service with the same employer receive 15 vacation days.
Employees also enjoy paid time off for several significant public holidays, including New Year’s Day, Maundy Thursday, and Good Friday.
Sick Leave
Employers registered with IGSS must provide sick leave to employees. The amount of sick pay depends on the type of illness, the employee’s length of service, and internal Social Security regulations.
If an employer isn’t registered with the IGSS, they are still required to grant sick leave until the employee fully recovers.
Maternity Leave
Pregnant female employees receive 12 weeks of paid maternity leave, which starts 30 days before the due date. Employees receive their full salary from the IGSS if they’ve contributed for at least four of the past six months and don’t have another job.
If the pregnant employee isn’t registered with Social Security, the employer covers their full salary during the leave.
Paternity Leave
New fathers in Guatemala are entitled to two days of fully paid paternity leave for the birth of their child.
Why Digital Nomads Love Guatemala
Guatemala is becoming a popular destination for self-employed digital nomads as well as full-time employees to work remotely, especially in Antigua, which has a strong expat community that makes it easy to connect with others.
The country offers reliable high-speed internet, particularly in urban areas and popular tourist spots, ensuring that remote workers can stay productive. Numerous co-working spaces, such as Impact Hub, provide fast and reliable connectivity.
While no digital nomad visa exists for Guatemala, visitors can stay in the country for 90 days on a tourist visa, potentially extending it for another 90 days.
How to Pay Remote Workers in Guatemala
There are several convenient options for companies to pay their remote employees in Guatemala.
- Bank transfers are a secure and reliable method for making direct payments to local bank accounts, though they may incur higher fees and take a few days to process.
- Employers can pay remote employees in cryptocurrency, offering faster and borderless transactions, but downsides include regulatory uncertainty, tax complications, and potential value volatility.
- Online payment platforms offer an easy-to-use solution that supports multiple currencies and enables quick transactions; however, they can have steep fees and may require both parties to have accounts.
- To simplify the payment process, many companies partner with Employer of Record (EOR) providers to handle all payroll responsibilities, guaranteeing timely payments in the employees’ preferred currencies.
Hire in Guatemala with Remofirst
Hiring in Guatemala can be challenging for companies unfamiliar with the local labor laws and regulations.
An EOR like Remofirst can manage human resources tasks, including onboarding, payroll, taxes, employee benefits such as health insurance, and compliance in Guatemala and more than 180 countries.
Book a demo with Remofirst today to learn more.
